Retrospective tax liability cannot arise from an explanation that creates new charging effect without clear legislative intent.

The explanation inserted to Section 65(19) of the Finance Act, 1994 was treated as creating a substantive legal fiction akin to a charging provision, so it could not apply retrospectively to tax the lottery business for the disputed period absent clear legislative intent. Following the Supreme Court in Martin Lottery Agencies Ltd., the Tribunal held that an explanation imposing new liability cannot be read as retrospective merely by form. The appeal therefore succeeded on the basis that the impugned explanation was not retrospective.

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Issues: Whether the explanation inserted to Section 65(19) of the Finance Act, 1994 operated retrospectively so as to tax the appellant's lottery business for the period in dispute.

Analysis: The explanation was treated as introducing a substantive legal fiction akin to a charging provision. The Tribunal applied the principle that where an explanation creates substantive liability, it does not operate retrospectively unless the statute clearly so provides. The decision of the Supreme Court in Martin Lottery Agencies Ltd. was followed as confirming that such an explanation cannot be given retrospective effect.

Conclusion: The explanation to Section 65(19) of the Finance Act, 1994 was not retrospective, and the appeal succeeded.

Ratio Decidendi: An explanation that introduces a substantive liability in the nature of a charging provision cannot be applied retrospectively in the absence of clear legislative intent.

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